Managed Care & Long-Term Services and Supports: A Tutorial

July 15, 2016

NC Medicaid Reform and Long-term Services & Supports Webinar Series: Summer 2016

NC Medicaid Reform and Long-Term Services & Supports

Long-term services and supports (LTSS)

Why move to managed care?

Key differences between fee-for-service and capitation

Managed care cycle

Scenarios

The Webinar Series Overview of Today

Last Week: Overview of NC Medicaid Transformation Act (SL 2015-245)

Today: Managed Care & Long-Term Services and Supports: A Tutorial

Next Week: North Carolina’s Proposed Direction: An Overview of NC’s 1115 waiver application

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Webinar Series

Long Term Services and Supports

Potentially cover many people who rely on supports related to their activities of daily living

Often applied to long-term services for people with physical disabilities, intellectual and developmental disabilities, mental illness, traumatic brain injury, medical complexities

Broader than just Medicaid; other organizations and funding streams also provide LTSS

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For today, “LTSS” is Medicaid-funded, long-term supports NOT covered or coordinated by a behavioral health managed care organization (NC LME-MCOs)

Examples: Beneficiaries using Community Alternatives Programs (CAP/C; CAP/DA); Personal Care Services (PCS); or in nursing facilities

Long Term Services and Supports

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Delivers Medicaid health benefits and additional services through contracted arrangements between state Medicaid agencies and contracted organizations set per member per month payment for these services

Medicaid Managed Care

5Image: Thinkstock by Getty Imageshttps://www.medicaid.gov/medicaid-chip-program-information/by-topics/delivery-systems/managed-care/managed-care-site.html

A system of reimbursement where the contracted organization is paid a set amount for each enrolled person assigned to them, per period of time, whether or not that person seeks care

Aggregate fees are intended to reimburse all provided services

Capitation: One of Several Managed Care Tools

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Managed Care Organizations

Comprehensive benefit package

Payment is risk-based/capitation

Primary Care Case Management

Primary care case managers contract with the state to furnish case management (location, coordination, and monitoring) services

Generally, paid FFS for medical services rendered plus a monthly case management fee

Prepaid InpatientHealth Plan

Limited benefit package that includes inpatient hospital or institutional services (example: mental health)

Payment may be risk or non-risk

Prepaid Ambulatory Health Plan

Limited benefit package that does not include inpatient hospital or institutional services (examples: dental and transportation)

Payment may be risk or non-risk

Managed Care EntitiesFederal regulations and CMS identify various types

Source: https://www.medicaid.gov/medicaid-chip-program-information/by-topics/delivery-systems/managed-care/managed-care-site.html

MCO PCCM PIHP PAHP

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Source: https://www.medicaid.gov/medicaid-chip-program-information/by-topics/data-and-systems/medicaid-managed-care/downloads/2014-medicaid-managed-care-enrollment-report.pdf

LTSS

Delivery of long term services and supports, such asnursing facility care and home- and community-based services,

through capitated Medicaid managed care programs

Comprehensive Commercial Plans / Provider-Led Entities

NC’s approach will include MLTSS as part of a more comprehensive managed care model.

MLTSS programs can either:

• Provide LTSS in addition to medical care through comprehensive MCOs, or

• Provide only LTSS benefitsthrough PIHPs or PAHPs,referred to as MLTSS-only programs

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Questions

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• Rule released by CMS earlier this year

• Codifies 10 elements first introduced in 2013 as part of MLTSS

• All MLTSS programs must operate according to:–Adequate planning–Stakeholder engagement–Provision of home- and community-

based services (consistent withOlmstead decision)

–Support for beneficiaries

• Requires states to create a stakeholder group of LTSS beneficiaries, providers and others to ensure their opinions are solicited and addressed during design, implementation and oversight of MLTSS program

• Medicaid must establish and maintain a member advisory committee that includes a reasonably representative sample of LTSS population

CMS Managed Care Final Rule - MLTSS

— Person centered process— Comprehensive, integrated service

package— Qualified providers — Participation protections— Quality

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Why States go to Medicaid Managed CareCost management is only part of the reason

IMPROVED CARE COORDINATION• Coordination across service delivery

sectors• Coordination across lifespan

CLEARER POINT OF ACCOUNTABILITY• Increase ownership of cost and

outcomes by plans and providers• Clearer responsibility for coordination

IMPROVE POPULATION HEALTH• Advance policy directions through

payment, contract requirements and quality measures

• Increase preventive service• Population-specific measures and

outcomes

EXPAND INNOVATION• Flexibility in how and where services are

provided• Enable ways to better address needs

(e.g., social determinants) that are not easily/effectively addressed in FFS (housing, employment, etc.)

• Improve investment in preventive approaches

COST MANAGEMENT• Medicaid health care costs are growing

faster than state GDP• Reduce inappropriate use of services• Increase competition

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Moving Beyond Traditional Cost Savings Measures

COST SAVING MEASURE POSSIBLE CONSEQUENCE

Cut eligibility Increase uninsured population

Cut provider rates • Hurt providers• Reduce access as providers exit

Cut optional benefits Save some $ but much care shifts to alternate services

Limit units of care per patient Prevent abuse but may harm high-need patients

Enhance program integrity Favorable but marginal impact

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Medicaid “Managed Care Entities” Already Exists in NC;Reform Moves State Toward a More Comprehensive Model

MCOs will take two forms:• Commercial Plans• Provider-Led Entities

Participating plans will be responsible for coordinating all services (except services carved out) and will receive a capitated payment for each enrolled beneficiary

What North Carolina Has Now What Medicaid Reform Will Bring

PRIMARY CARE CASE MANAGEMENT (CCNC)• Primary care provider-based• State pays additional fee to provide care

management

PACE• Comprehensive, capitated• 55 years old and older• Available in certain areas, not currently

statewide

BEHAVIORAL HEALTH PREPAID HEALTH PLAN (LME-MCOs)

• Cover specific populations and specific services

• Provides care coordination for identified and priority groups

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39 States Use Comprehensive MCOs

WY

WI

WV

WA

VA

VT

UT

TX

TN

SD

SC

RIPA

OR

OK

OH

ND

NC

NY

NM

NJ

NH

NVNE

MT

MO

MS

MN

MIMA

MD

ME

LA

KYKS

IA

INIL

ID

HI

GA

FL

DC

DE

CT

COCA

ARAZ

AK

AL

PCCM only

MCO only

No Comprehensive Managed Care

MCO and Primary Care Case Management

Source: Adapted from findings of Health Management Associates survey conducted for Kaiser Family Foundation, Oct. 2014

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Most States Reform Incrementally

• Coordination agreements layered onto FFS• Full-risk MCOs in limited areas• Voluntary enrollment in MCO• Confined to “moms and kids” Medicaid population• Carve-outs from MCO services:

Behavioral/Rx/LTSS/Dental

• FFS/PCCM mostly eliminated• Full-risk MCOs everywhere• Mandatory enrollment in MCO• All Medicaid aid categories in MCO• MCO contracts span all services

• Widen MCO-covered territory• Mandate enrollment• Add harder-to-manage populations• Capitate carved-out benefits

Progression over 20-25 years not uncommon

TANF = Temporary Assistance for Needy Families15

Questions

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CURRENT POTENTIAL

Financial Risk State government (with federal match) Insurance Plan (MCO/PLE)

Medical Management

Currently focused on and/or around primary care Comprehensive

Care Coordinationfor LTSS

Reliant on more services but remain the least coordinated group

Expanded coordination of care across services and/or delivery systems

InnovationLimited flexibility because FFS can only pay for services provided

Encourages flexibility of reimbursement to providers

Access Unlimited network of providers but limited access

Limited network with unlimited access

Key Differences: Current (FFS) vs. Potential (Managed Care)

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Key Differences: Current (FFS) vs. Potential (Managed Care)

CURRENT POTENTIAL

Network of care Providers fragmented Providers contract with CP or PLE

Provider Reimbursement

Provider paid per visit or procedure; rewards volume & intensity

Provider paid per enrollee with VBP to providers

EnrollmentBeneficiary enrolls in Medicaid; uses providers who accept Medicaid

Beneficiary enrolls in Medicaid; selects or is assigned to MCO or PLE Medicaid Health Plan

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Fixed fee (per member per month)• Payment amounts based on average expected health care

utilization of that patient, with greater payment for patients with significant medical history

Specific period of time (generally a month)• Per member per month

Defined set of services (benefits)

Assigned population of members

Provider accepts “risk” for delivering services

How Capitation Works

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Capitation payments are set through a rate-setting process• Groups divided by Medicaid aid category, age, certain chronic

illnesses• “Risk adjusted” based on acuity, geography, Medicaid aid category• Prior FFS acuity

Managed care does not mean a one size fits all PMPM• An MCO may get paid X for all services provided to a pregnant woman• An MCO gets paid Y for a healthy child• An MCO may get Z for a person with long-term support needs

Set rates that encourage quality, prevention and healthy outcomes

How that is defined sometimes depends on the population

A Note about Capitation and LTSS

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Questions

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What Will Change What Will Remain the Same

• Medicaid beneficiaries will enroll in their choice of health plans

• Providers receive capitated payments and incentive payments for quality care goals

To be Transitioned

• Dental services (FFS)• Program of All-inclusive

Care for the Elderly (PACE) services (carved out of PHP scope)

• Local education agency services (FFS)

• Child development service agencies (FFS)

• Short-term eligibility groups; e.g., emergency-only services (FFS)

• Services provided by CCNC

• Strategy to include dual eligibles (enrollees in both Medicare and Medicaid)

Just a Reminder: NC Medicaid Reform Basics

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Region I

Region II Region IV

Region III

Region V

Region VI

IIIIIIIVVVI

II & IV

PopulationRegion165k280k410k299k291k230k

29k

Proposed Regions

Populations estimated from June 2015 enrollment data

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Cycle of Managed Care – Provider Perspective

MCO/PLE conducts quality and compliance audits

Payment Made

CP/PLE /DHHS payment systems review claims

Providers submit claim for the services using the federal codes and modifiers agreed to for the services

Some services require authorization before access, based on contract

Beneficiaries/families select providers within the network

Providers agree to a contract that sets the fees

CP/PLE seeks providers for a network based on the needs outlined in the CP/PLE contract

DHHS agrees to a contract with CP/PLE, which outlines benefits and limitations of services.

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Open Enrollment Begins

Beneficiary notified of available plans

Beneficiary works with DSS/enrollment

broker to understand choices between

plans

Beneficiary enrolls in plan or is auto-

enrolled based on historical use/needs

Beneficiary linked to care management

coordinator/medical home

Plan works with beneficiary to manage

beneficiary care

Lock-in period ends and/or beneficiary decides to enroll in

another plan

DHHS/DMA/DHB

Cycle of Managed Care – Beneficiary Perspective

Managed Care Rules provides additional enrollment/disenrollment protections for LTSS beneficiaries.25

• Age 85• Receives Medicaid and Medicare• Receives services under CAP/DA

PROFILE

No new decisions initially required under Medicaid reform

CHOICES

Image: Thinkstock by Getty Images

DELIVERY • Medicaid services remain available• CAP/DA services remain available• Neither is coordinated through PHP

medical home

Illustrative purposes only; based on June 1, 2016, Section 1115 waiver application as submitted to CMS. Application is subject to modification by CMS prior to final approval.

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• 30 years old• Receives Medicaid, but not Medicare• Receives behavioral health services

through LME-MCO

PROFILE

• Health plan: 3 statewide and 2 regional• Primary care physician/medical home• Beneficiary has access to enrollment

broker to assist in decision-making

DELIVERY

CHOICES

Image: Thinkstock by Getty Images

• Medical care received through his chosen PCP and medical home

• Medical services under health plan• Behavioral health care under LME-MCO

Illustrative purposes only; based on June 1, 2016, Section 1115 waiver application as submitted to CMS. Application is subject to modification by CMS prior to final approval.

27Image: Thinkstock by Getty Images

• 7 years old• Medically complex• Receives Medicaid only

PROFILE

• Health plan: 3 statewide and 2 regional• Primary care physician/medical home• Beneficiary has access to enrollment

broker to assist in decision-making

DELIVERY

CHOICES

Image: Thinkstock by Getty Images

Illustrative purposes only; based on June 1, 2016, Section 1115 waiver application as submitted to CMS. Application is subject to modification by CMS prior to final approval.

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• All Medicaid services coordinated through selected plan

• Any school-based services remain outside of plan

• Improved coordination among all services used, including non-Medicaid

Questions

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For Managed Care Overview: https://www.medicaid.gov/medicaid-chip-program-information/by-topics/delivery-systems/managed-care/managed-care-site.html

For Managed Care Final Rule: https://www.medicaid.gov/medicaid-chip-program-information/by-topics/delivery-systems/managed-care/managed-care-final-rule.html

For Summary of Key LTSS Provisions in Final Rule: https://www.medicaid.gov/medicaid-chip-program-information/by-topics/delivery-systems/managed-care/downloads/strengthening-the-delivery-of-managed-long-term-services-and-supports-fact-sheet.pdf

Additional Information and ResourcesCMS-Affiliated Links

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Coming up

FRIDAY, JULY 22 North Carolina’s Proposed Direction: An Overview of NC’s 1115 Waiver Application

• Registration for upcoming webinars• Dual Eligibles Advisory Committee information

www.ncdhhs.gov/nc-medicaid-reform

www.ncdhhs.gov/dual-eligibles-advisory-committee

• Medicaid reform updates, presentations and materials• Session law 2015-245• June 1, 2016, waiver demonstration application

Registration for session is required

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Recognizing the importance of ongoing dialogue,the Department will seek and identify opportunities for

additional discussion and engagement